BBC expert says state pensioners born before date getting £300 letters | Personal Finance | Finance

A BBC specialist has cautioned that starting in April, millions of households are receiving correspondence from HMRC informing them they may be required to return their Winter Fuel Payment. The government assistance scheme is intended to support elderly households with heating expenses throughout the winter period.

Payments were distributed in November and December last year. Consumer specialist Rebecca Wilcox told BBC Morning Live viewers: “The Winter Fuel Payment was a lump sum that was paid out to help you with your fuel bills during the cold months of November and December. That’s when the payments were made. What happened was they paid everybody who was over the age threshold. You were eligible to keep it if you were born before 22 September 1959 – that’s for England, Wales and Northern Ireland. Or the 21 September 1959 in Scotland.

“If you’re born before that and you earn £35,000 exactly and under you can keep it. If you earn even a penny over the £35,000 of your personal, taxable income, then you will need to pay back this payment. The payment was between £100 and £300 and that number was calculated on your circumstances, your household circumstances and how old you are.

“For some this is going to be the first they’ve heard about repayment. And there’s a reason that this is happening and it’s because HMRC can do many things but it cannot predict the future.

“It has no idea how much you’re going to earn in that future tax year. So it’s just given it to everybody and then when it knows how much you’ve earned which is April, it will take back the money that it paid you back in November.”

“If you earn over £35,000 and are within the age bracket you will be required to pay this back in full.”

She explained that HMRC provides an online tool for those uncertain whether their earnings exceed this limit.

Winter Fuel Payments, referred to in Scotland as Pension Age Winter Heating Payments, are yearly financial grants designed to assist with winter energy costs. For the current payment, those eligible must have been born before 22 September 1959 in England, Wales or Northern Ireland, and before 21 September 1959 in Scotland.

The sum awarded varies between £100 and £300 based on age and living arrangements. HMRC is unable to verify final earnings until the tax year concludes.

Since payments must be distributed ahead of winter, the mechanism operates by initially paying all qualifying individuals before subsequently contacting those whose income proves to exceed the threshold. In the majority of instances, the funds will be reclaimed automatically via the tax system.

HMRC will modify the individual’s tax code for the 2026 to 2027 tax year. The repayment will appear as an underpayment, resulting in slightly increased tax deductions each month.

No interest is levied on the amount being repaid. For instance, someone who received £200 might see their monthly income decrease by approximately £17 whilst the repayment is gathered.

Those who complete a Self Assessment tax return will instead have the repayment added to their tax bill for the 2025 to 2026 tax year. Anyone who believes the calculation is incorrect can contest the decision with HMRC.

Scammers frequently send messages masquerading as government departments requesting personal details or payment. HMRC has confirmed that official letters regarding Winter Fuel Payment repayments will clearly state that no action is necessary and will not request personal or financial information.

If you receive any message asking you to provide details or make a payment in relation to the Winter Fuel Payment, discard it. Individuals who know their income will remain above £35,000 can choose to opt out of receiving the Winter Fuel Payment in future.

From 1 April 2026, households can opt out of the 2026 to 2027 payment by contacting the Winter Fuel Payment Centre or completing a form online. You will need your National Insurance number to do this.

Once you opt out, future payments will cease unless you decide to opt back in.

The primary reason to opt out if you anticipate your income remaining above the threshold is due to HMRC’s plans from the 2027 to 2028 tax year to recoup payments in advance rather than in arrears, which could result in approximately double deductions.

For a typical £200 payment, this could equate to roughly £33 a month being deducted through the tax system instead of around £17. The deductions are projected to revert to the lower monthly sum in the subsequent tax year.